Smartphone owners paid less for apps in 2010

It looks like smartphone owners are pretty cheap, despite carrying around flashy and often expensive devices.

Prices for paid applications on app stores fell by about 16 percent in 2010, and free applications that make money off in-app purchases grew increasingly popular when compared to 2009, according to a new report by Distimo.

The price of the average application on Apple’s app store fell 12 percent, while the prices for BlackBerry applications fell 24 percent. Android applications were actually 1 percent more expensive in 2010 across the entire marketplace. But the top 100 applications on the Android marketplace were 9 percent cheaper than they were a year ago. The prices of the top 100 applications across all marketplaces fell by around 28 percent.

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The $1 to $2 price point was the most popular choice for developers looking to sell their applications. The number of applications at that price point grew to 27 percent of all applications, up from 22 percent in January. The number of applications costing more than $5 fell to 15 percent of all applications across app stores, compared to 21 percent of all applications in January.

More applications on Apple’s App Store switched to a freemium model, which lets users download applications for free and then makes money by selling premium services through the application. About 34 percent of all revenue generated by App Store applications came from in-app purchases on free applications. Half of the revenue generated from the App Store came from paid application sales.

The top free applications across all app stores generated around 3 million downloads each day last year. Paid applications generated around 350,000 downloads each day. Those numbers exclude app downloads on and after Christmas in order to give a more accurate picture of the marketplace.

The most popular category for applications on Apple’s App Store was business-oriented applications, where downloads grew 186 percent when compared to a year earlier. Apple has been charging into the enterprise space for a while now, but still has a while to go before it catches up with Research in Motion’s 55 million BlackBerry users. Applications for viewing comics were the most popular on the Android marketplace, and entertainment-focused applications were the most popular on the BlackBerry app marketplace.

Nokia’s struggles continued with its Ovi app store in 2010. The Ovi store trailed behind Android and other competitors with around 25,000 free applications and 18,000 paid applications. The cost of paid applications across the Ovi store fell 29 percent, and the top 100 applications on the Ovi store were 61 percent cheaper than they were a year ago. Free applications were more popular than paid applications because many Nokia users were unable to apply the cost of each app to their monthly phone bills, according to the report.

Despite having a smaller marketplace, the Ovi store grew the most quickly — with the number of free applications increasing by about 900 percent, and the number of paid applications rose 258 percent. The Apple App Store, which has around 300,000 applications, grew steadily — the number of free applications on the store grew by 174 percent, and the number of paid applications grew by 111 percent. The number of applications — both paid and free — in the Android Marketplace grew by about 270 percent to 130,000 when compared to 2009.